Questions
You are the audit senior on the audit engagement of Brown’s Farm Produce. You have assigned...

You are the audit senior on the audit engagement of Brown’s Farm Produce. You have assigned the role of identifying subsequent events for this audit client to Brian Peters who is Senior Associate with your firm. This is his first subsequent events review. The following information pertains to the audit engagement of Brown’s Farm Produce.

i)  Detailed audit work was completed on Thursday 5 December 1997.

ii)  The proposed audit report sign date is Friday 19 December 1997.

iii)  It is proposed that the financial statements be sent to the shareholders on Tuesday 6 January 1998 and

iv)  Brown’s Farm Produce will have their AGM on Wednesday 28 January 1998.

You are required to provide coaching to Brian as it relates to the following:

1. The auditor’s responsibilities for detecting material subsequent events in the following periods:

-  31 October to 5 December 1997

-  5 December to 19 December 1997

-  19 December to 5 January 1998

-  5 January 1998 to 28 January 1998

-  After 28 January 1998

2.  Design three audit procedures which can be used to examine subsequent reviews.

3.  Describe to Brian the audit work he should perform at period ii) above.

In: Finance

You are the audit senior on the audit engagement of Brown’s Farm Produce. You have assigned...

You are the audit senior on the audit engagement of Brown’s Farm

Produce. You have assigned the role of identifying subsequent events

for this audit client to Brian Peters who is Senior Associate with

your firm. This is his first subsequent events review. The following

information pertains to the audit engagement of Brown’s Farm

Produce.

i) Detailed audit work was completed on Thursday 5 December

1997.

ii) The proposed audit report sign date is Friday 19 December 1997.

iii) It is proposed that the financial statements be sent to the

shareholders on Tuesday 6 January 1998 and

iv) Brown’s Farm Produce will have their AGM on Wednesday 28 January 1998.

You are required to provide coaching to Brian as it relates to the

following:

1. The auditor’s responsibilities for detecting material subsequent

events in the following periods:

- 31 October to 5 December 1997

- 5 December to 19 December 1997

- 19 December to 5 January 1998

- 5 January 1998 to 28 January 1998

- After 28 January 1998

2. Design three audit procedures which can be used to examine

subsequent reviews.

3. Describe to Brian the audit work he should perform at period ii)

above.

In: Accounting

On 19 October 2016, Tatts Group Limited (Tatts) and Tabcorp Holdings Limited (Tabcorp) announced a Merger...

On 19 October 2016, Tatts Group Limited (Tatts) and Tabcorp Holdings Limited (Tabcorp) announced a Merger Implementation Deed to combine the two companies and create a diversified gambling entertainment group with a pro forma enterprise value of AUD11.3 billion. The share prices of Tatts and Tabcorp were $4.16 and $5.06 on 19 October 2016 respectively. The merger was via a scheme of arrangement that offered cash and scrip with Tatts shareholders receiving 0.80 New Tabcorp Shares and 42.5c cash for each Tatts share. Tabcorp, a gambling entertainment company, had an AUD4 billion market capitalisation before the scheme announcement. It operated three core businesses – Wagering and Media, Keno, and Gaming Services – employed over 3,000 people, had revenue of AUD2.15 billion in FY15, and AUD334.5 million net income. Tatts, before merging with Tabcorp, provided gambling services with an AUD5.8 billion market capitalisation. Through its lottery, wagering and gaming operations Tatts reported FY15 revenue of AUD2.9 billion and net income of AUD 233.8 million.

The Tatts shareholders received 0.80 Tabcorp Shares and 42.5c cash for each Tatts share. Is this a good deal for Tatts shareholders from EPS and share price perspectives?

In: Accounting

The renown experimental filmmaker James Incandenza has finally found a cure for boredom. His creation is...

The renown experimental filmmaker James Incandenza has finally found a cure for boredom. His creation is known as the “The Entertainment.” Demand for The Entertainment in the United States is Qu = 100-P. Demand for The Entertainment in Canada is Qc = α100-P. The total cost of producing The Entertainment is C(Q) = 20Q. James Incandenza must decide whether to only sell The Entertainment in the United States or to sell it in both the United States and Canada. If James must charge the same price in both countries, what is smallest value of ↵ such that James will sell in both countries?

In: Economics

Perfect Party Company contracts with a customer to provide its birthday party? package, including a? cake,...

Perfect Party Company contracts with a customer to provide its birthday party? package, including a? cake, balloons, and musical entertainment. In? addition, Perfect Party will host the event. Perfect Party offers the musical entertainment only when it also hosts the party. It often sells cakes and balloons separately that it delivers before a party. Identify the separate performance obligations in this contract. ? (Yes /? No) 1. Providing the cake 2. Providing the balloons 3. Hosting 4. Providing musical entertainment 5. Providing hosting and musical entertainment 6. Providing the cake and hosting 7. Providing the cake and balloons 8. Providing the cake and musical entertainment 9. Providing the balloons and hosting 10. Providing the balloons and musical entertainment

In: Accounting

The revenue agent who audited Mr. and Mrs. Camden's 2016 Form 1040 assessed a $55,200 deficiency...

The revenue agent who audited Mr. and Mrs. Camden's 2016 Form 1040 assessed a $55,200 deficiency and concluded that $23,900 of the deficiency resulted from Mr. Camden's deliberate disregard of the tax rules concerning business entertainment expense. The remaining deficiency resulted from various errors caused by confusing instructions on the tax forms.

Compute the negligence penalty that the agent can impose.

$4,780

$11,040

$6,260

Only a federal court can impose a negligence penalty.

In: Finance

Sun Microsystems is a leading supplier of computer-related products, including servers, workstations, storage devices, and network...

Sun Microsystems is a leading supplier of computer-related products, including servers, workstations, storage devices, and network switches. In 2009, Sun Microsystems was acquired by Oracle Corporation. In the letter to stockholders as part of the 2001 annual report, President and CEO Scott G. McNealy offered the following remarks: Fiscal 2001 was clearly a mixed bag for Sun, the industry, and the economy as a whole. Still, we finished with revenue growth of 16 percent—and that's significant. We believe it's a good indication that Sun continued to pull away from the pack and gain market share. For that, we owe a debt of gratitude to our employees worldwide, who aggressively brought costs down—even as they continued to bring exciting new products to market. The statement would not appear to be telling you enough. For example, McNealy says the year was a mixed bag with revenue growth of 16 percent. But what about earnings? You can delve further by examining the income statement in Exhibit 4. Also, for additional analysis of other factors, consolidated balance sheet(s) are presented in Exhibit 5.

Exhibit 1

                        2001 Dollars 2000 Dollars 1999 Dollars 1998 Dollars

Net revenues $ 18,550        $ 15,726           $11,804         $ 9,865

Costs and expenses:

Cost of sales $ 10,044         $ 7,543             $ 5,675          $ 4,645

Research and

development

                       2,011               1,626                1 ,273            1,034

Selling, general

and administrative

                        4,547               4,069               3,188              2,836

Goodwill

amortization

                           260                    63                    19                 0.3

In-process

research and

development

                             80                     11                  117                178

Total costs and

expenses

                    $ 16,942          $ 13,312           $ 10,272          $8,693.3

Operating Income

                       $1,608           $ 2,414             $ 1,532           $1,171.7

Gain (loss) on

strategic investments

                         $ -94                $ 206                       -                     -

Interest income, net

                        $ 362                $ 170                 $ 86                $ 48

Litigation settlement

                             -                         -                          -                   -

Income before taxes

                    $ 1,876               $ 2,790             $ 1,618         $1,219.7

Provision for income

taxes

                  $ 1,004.9             $ 969.12            $ 699.6          $ 426.2

Cumulative effect of

change in accounting

principle, net

                        $ -55                            -                     -                   -

Net income

                      $ 926.1            $1,820.88           $ 918.4          $ 793.5

Net income per

common share-

                        $ 0.27                 $ 0.54              $ 0.28           $ 0.25

diluted

Shares used in the

calculation of net

income per common

share-diluted

                           3,430             3,372                 3,280               3,174

Part A

Referring to Exhibit 1, compute the annual percentage change in net income per common share-diluted (second

Rate of change, 1998 to 1999:

Rate of change, 1999 to 2000:

Rate of change, 2000 to 2001:

Part B

Also in Exhibit 1, compute net income/net revenue (sales) for each of the four years. Begin with 1998.

1998 Profit Margin:

1999 Profit Margin:

2000 Profit Margin:

2001 Profit Margin:

Part C

Compute return on stockholders’ equity for 2000 and 2001 using data from Exhibits 1 and 2.

2000 Return on Stockholders' Equity:

2001 Return on Stockholders' Equity:

Part D

Analyze your results to Question 2 (Part B above) more completely by computing ratios 1, 2a, 2b, and 3b (these

numbers correspond with the numbered ratios listing in Chapter 3 of our textbook) for 2000 and 2001. Actually,

the answer to ratio 1 can be found as part of the answer to question 2 (Part B), but it is helpful to look at it again.

Ratio             2000                   2001

1

2a

2b

Part E

The average stock prices for each of the four years shown in Exhibit 1 were as follows:

1998 11¼

1999 16¾

2000 28½

2001 9½

Compute the price/earnings (P/E) ratio for each year. That is, take the stock price shown above and divide by net

income per common stock-dilution from Exhibit 1.

1998 P/E Ratio:

1999 P/E Ratio:

2000 P/E Ratio:

2001 P/E Ratio:

In: Finance

You work for Entertainment Supplies Pty Ltd – a supplier of entertainment products to the industry....

You work for Entertainment Supplies Pty Ltd – a supplier of entertainment products to the industry. The following transactions relate to dealings with Fairy Floss Trading Pty Ltd over the month of August 2015. At the start of August, this debtor already owed $200.

Purchases

Aug 2 Invoice 765 $120 plus $12 GST

Aug 9 Invoice 791 $160 plus $16 GST

Aug 15 Invoice 823 $140 plus $14 GST

Aug 24 Invoice 845 $200 plus $20 GST

Aug 30 Invoice 891 $180 plus $18 GST

Payments (Cash)

Aug 4 Cheque 8912 $200

Aug 14 Cheque 8922 $250

             Discount Received $10

Aug 29 Cheque 8937 $310 Discount Received $15

You are to:

Prepare the debtors record for Fairy Floss Trading Pty Ltd, showing all transactions

during the month of June 2015

Explain how reliability has been satisfied in your debtors record

State one benefit of the debtor taking advantage of discounts for prompt payment

State one disadvantage for your debtor making a prompt payment in order to get a

discount

In: Accounting

Who are you? You are the vice president of operations at Exquisite Entertainment, an entertainment company...


Who are you?

You are the vice president of operations at Exquisite Entertainment, an entertainment company that owns and operates 19 seasonal and year-round amusement parks (Worlds of Play) located throughout the U.S. You are responsible for providing overall direction and guidance with regard to the operational activities of the organization.

What''s the current situation?

The company''s amusement parks have always been popular, but recently they haven''t been very profitable. Operating costs have been rising, and every dollar of extra revenue has been hard won. At the company''s annual management offsite meeting held that morning at Worlds of Play-Seattle, Alex Harrington, a business strategy consultant from Ernst & Young LLP, unveiled "Operation Upmarket," a business strategy proposal aimed at addressing the issue of profitability for Worlds of Play. This plan proposed that Worlds of Play offer its customers the option of a "preferred guest" card. Cardholders would pay more, but they would get first crack at the rides and would get seated immediately at any of the park''s restaurants. According to Alex, the plan would help Worlds of Play finances because it would target the "mass affluents"--wealthy but time-pressed people who might visit the park more often and spend more time while there, were it not for long lines at the rides.

You think back to that morning's meeting. You respect Alex's plan, but what about the initiatives you had implemented to tap into that same segment? In fact, you have already had some successes. Roughly 20% of Worlds of Play souvenir shops have been upgraded to gift boutiques with more appealing displays and higher-priced merchandise, and some snack concessions have been converted to seated dining. The most upscale of the restaurants are already earning almost double the profit per square foot of the other food-service facilities.

Alex had done an impressive amount of work developing the idea, commissioning surveys and focus groups, and getting finance to run the numbers. Her presentation had been persuasive, you admit. Her tactic had been to get people arguing the details--should the pass cost $20 more than general admission or $30 more?--while ignoring the question of whether it was a good idea at all. At first, this approach seemed to be working. But Grace Jones, Exquisite Entertainment's vice president of human resources said, "Clearly, there's revenue to be gained from offering these differentiated service levels. But it just doesn't seem like us. The founder of Worlds of Play created a place where families could come together for a day to forget about their cares." Alex said, "Our history is great, but if things don't turn around fast, we are going to be history. The company has to make changes quickly to avoid cash-crunch-driven bankruptcy or a hostile takeover."

It was no secret to anyone in the meeting that theme parks have only three ways to bring in more revenue: (1) increase visits per customer, (2) increase average spending per visit, or (3) attract new customers. Alex argued that the guest card would address the last two items by attracting a different type of customer--time-starved, high-income professionals and their families--who might otherwise avoid the whole experience.

Adam Goodwin, the VP of marketing said, "It strikes me as a very shortsighted strategy. I mean, sure we could make a lot of money on those cards in the first couple of seasons. But just think about what it does to the overall customer experience. The average Joe with his wife and three kids is not going to shell out for five upgrades. So they are going to be sweating through even longer lines and just steaming when they see some yuppie waltz ahead of them. I don't even think it's a great experience for the preferred guests. Who wants to feel all the anger directed at them? The key to this business is that the customers feel good while they are here. A couple of ugly glances, a nasty remark, and the day is spoiled for everybody. Neither side's coming back."

"I should have explained," Alex said. "We would definitely separate the lines so the preferred cardholders wouldn't be in people's faces and we'd limit the percentage of special tickets issued on any given day. But I don't think you are giving your customers enough credit. People have a lot more awareness and appreciation of the fact that time is money. This program lets them choose which they want to save."

What are you supposed to do?

You have been charged by CEO Len Becker to summarize the merits of the option presented at the meeting in his absence. Craft the body of a document for Mr. Becker.

Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English.

In: Operations Management

According to a recent study, 40% of children under the age of 2 have used a...

According to a recent study, 40% of children under the age of 2 have used a mobile device as a form of entertainment (i.e play video games, watch movies, listen to, music, etc.) If a random sample of 200 children under the age of 2 is selected determine the probability that: a) at least 45 % have used a mobile device as a form of entertainment. b) between 37% and 48% have used a mobile device as a form of entertainment c) at least 55% have not used a mobile device as a form of entertainment

In: Statistics and Probability